Malaysia approves rare earths plant

Kuala Lumpur - Malaysia gave the green light on Wednesday for a controversial rare earths plant being built by Australian miner Lynas despite fears its could produce harmful radioactive waste.

Malaysia's Atomic Energy Licensing Board said it granted a licence for the plant, which is near completion in the eastern state of Pahang, to begin operations for an initial two-year period under strict safety requirements.

"Based on the decision of the board, Lynas's application for a temporary operating licence is approved with several conditions," a board statement said.

It added the licence could be suspended or revoked if the company failed to meet conditions on handling potentially hazardous waste.

The facility is set to become one of the few sites outside China to process rare earths - metals used in high-tech equipment ranging from missiles to mobile phones.

Lynas has insisted the plant, which will handle rare earths imported from Australia, will be safe. But critics say radioactive waste could leak out, threatening public health and the environment.

The atomic licensing board reviewed Lynas's application in a closed-door meeting on Monday. The plant had originally been slated to start operations in the third quarter of last year.

The board said Lynas must submit plans within 10 months on how it would safely dispose of plant waste, and return it to "the original source" if necessary.

Lab rats

It also said Lynas will pay $50m to the Malaysian government as financial guarantee. If Lynas breaches the conditions and loses the license, it cannot apply for another, it said.

Fuziah Salleh, an opposition lawmaker in Pahang who has lead protests against the plant, said lawyers were expected to seek a court injunction to stop the plant from starting operations.

Fuziah, whose constituency is Kuantan, a coastal town near the plant site, said the company's waste management plan was "incomplete, full of holes and unacceptable".

"Of course I'm disappointed," she told AFP. "Basically the residents will become lab rats. We will become experiments."

Thousands of Malaysian opponents of the plant have held protests against the plant, mainly in Kuantan, over health and safety concerns.

The concerns led Malaysia to invite a panel of experts from the International Atomic Energy Agency to assess plans for the plant last year.

Malaysia ordered Lynas to comply with all safety recommendations made by the panel. Lynas has pledged to do so and says any waste will be handled according to strict standards.

Currently, China produces more than 95% of the world's rare earths - 17 elements critical to manufacturing everything from iPods to low-emission cars.

But Beijing has angered its trade partners by restricting overseas shipments in a bid to burnish its green credentials and tighten its grip over the metals, leading other countries to explore alternate sources.

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